<PAGE>

               SECURITIES AND EXCHANGE COMMISSION

                    Washington, D.C.  20549


                         Form 10-Q


               Quarterly Report Under Section 13 or 15(d) 
               of the Securities Exchange Act of 1934.


For Quarter Ended:  October 3, 1998Commission file number:  0-7469


     
                     TJ INTERNATIONAL, INC.
------------------------------------------------------------------------------
     (Exact name of registrant as specified in its charter)


DELAWARE                                            82-0250992
---------------------------------            ------------------
(State or other jurisdiction of              (I.R.S. Employer
incorporation or organization)               Identification No.)


200 E. Mallard Drive
BOISE, IDAHO                                            83706
---------------------------------            ------------------
(Address of principal executive offices)          (Zip Code)


Registrant's telephone number, including area code    (208) 364-3300
                                             ------------------


     Indicate by check mark whether the registrant (1) has filed all
     reports required to be filed by Section 13 or 15(d) of the 
     Securities and Exchange Act of 1934 during the preceding 12 months
     (or for each shorter period that the registrant was required to 
     file such reports) and (2) has been subject to such filing 
     requirements for the past 90 days.  Yes  _X_    No  ___   


     Indicate the number of shares outstanding of each of the issuer's
     classes of common stock, as of the latest practicable date.  
     November 12, 1998:  15,717,230 shares of $1 par value common stock.

                                        EXHIBIT INDEX ON PAGE 18

<PAGE>

                     TJ INTERNATIONAL,  INC.

                 PART I.  Financial Information

The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission, under the Securities Exchange Act
of 1934, as amended.  In the opinion of management, all adjustments necessary
to present fairly the results for the periods presented have been included
therein.  The adjustments made were of a normal, recurring nature.  Certain
information and footnote disclosure normally included in financial statements
have been condensed or omitted in accordance with such rules and regulations,
although the Company believes that the disclosures are adequate to make the
information presented not misleading.  It is recommended that these condensed
financial statements be read in conjunction with the audited financial
statements and the notes thereto included in the Company's latest annual
report on Form 10-K.

The results of operations for the periods presented are not necessarily
indicative of the results that might be expected for the fiscal year ending
January 2, 1999.

<PAGE>
<TABLE>
<CAPTION>
                     TJ INTERNATIONAL, INC.  
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
                           (Unaudited)  

                         (amounts in thousands except per share figures)
<S>  <C>                 <C>       <C>       <C>       <C>
                            For the fiscal   For the three fiscal
                            quarter ended       quarters ended  
                         ---------------------------------------
                         Oct. 3,   Sept. 27, Oct. 3,   Sept. 27,
                          1998      1997      1998       1997
                         ---------------------------------------

Sales                    $222,423  $185,576  $601,613  $532,569
                         --------  --------  --------  --------

Costs and expenses
     Cost of sales        166,330   133,530   440,917   386,051
     Selling expenses      21,204    17,426    60,094    53,725
     Administrative expenses   9,861   8,729   28,874    26,053
                         --------- --------- --------  --------
                          197,395   159,685   529,885   465,829
                         --------- --------- --------  --------

Income from operations     25,028    25,891    71,728    66,740

Investment income, net      2,042     1,438     5,799     2,726

Interest expense           (2,201)   (1,596)   (6,740)   (4,709)

Minority interest in 
  Partnership             (12,179)  (12,065)  (34,246)  (30,340)
                         --------- --------- --------- --------
Income before income taxes  12,690   13,668    36,541    34,417

Income taxes                4,759     5,126    13,703    12,907
                         --------- --------- --------- ---------
Net income                  7,931     8,542    22,838    21,510
                         ========= ========= ========= =========
Net income per common share
     Basic               $   0.46  $   0.48  $   1.32  $   1.21
                         ========= ========= ========= =========
     Diluted             $   0.43  $   0.45  $   1.23  $   1.12
                         ========= ========= ========= =========

Dividends declared per 
  common share           $ 0.0550  $ 0.0550  $ 0.1650  $ 0.1650
                         ========= ========= ========= =========
Weighted average number of 
common shares outstanding 
during the periods
     Basic                                     16,711    17,200
                                             ========= =========
     Diluted                                   18,219    18,713
                                             ========= =========

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

</TABLE>

<PAGE>

                     TJ INTERNATIONAL, INC.  
              CONDENSED CONSOLIDATED BALANCE SHEETS
                           (UNAUDITED)  

<TABLE>
<CAPTION>
                                   (AMOUNTS IN THOUSANDS)
<S>  <C>                      <C>       <C>       <C>
                              Oct. 3,   Jan. 3,   Sept. 27,
                                1998      1998      1997
ASSETS                        --------- --------- ----------
Current assets
     Cash and cash equivalents$ 136,814 $ 119,087 $  96,771
     Marketable securities         ---     40,751      ---
     Receivables, less allowances
        of $390, $397 and $400   98,738    55,369    78,358
     Inventories                 65,999    68,954    54,739
     Other                       12,833    10,923    11,445
                              --------- --------- ----------
                                314,384   295,084   241,313
Property
     Property and equipment     626,209   603,693   591,523
     Less-Accumulated depreciation (249,254) (223,207) (212,837)
                              --------- --------- ----------
                                376,955   380,486   378,686

Goodwill                         18,720    19,500    19,760
Other assets                     17,892    17,034    25,005
                              --------- --------- ----------
                              $ 727,951 $ 712,104 $ 664,764
                              ========= ========= ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities

     Accounts payable            39,064    25,238    43,330
     Accrued liabilities         51,970    50,641    49,884
                              --------- --------- ----------
                                 91,034    75,879    93,214

Long-term debt                  142,390   142,390    99,790
Other long-term liabilities      21,569    18,336     6,050
Reserve for discontinued operations   14,018   17,482   18,139

Minority interest in Partnership  233,676  216,605  213,688

Stockholders' equity
     ESOP Convertible Preferred Stock,
       $1.00 par value, authorized
       10,000,000 shares, issued 
       1,135,019, 1,147,219, and 
       1,151,312                 13,391    13,535    13,584
     Guaranteed ESOP Benefit     (8,188)   (8,188)   (9,204)
     Common stock, $1.00 par value, 
       authorized 200,000,000 
       shares, issued 18,017,545,
       17,807,142, and 17,765,026   18,018   17,807   17,765
     Paid-in capital            159,505   153,936   150,832
     Retained earnings          105,563    86,116    82,196
     Other                       (1,921)   (1,730)   (1,687)
     Accumulated other comprehensive 
       income (loss)             (6,760)   (3,805)   (3,344)
     Common stock in treasury, 
       2,321,605, 761,152, and
       761,152 shares, at cost  (54,344)  (16,259)  (16,259)
                              --------- --------- ----------
                                225,264   241,412   233,883
                              --------- --------- ----------
                              $ 727,951 $ 712,104 $ 664,764
                              ========= ========= ==========

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

</TABLE>
<PAGE>

                     TJ INTERNATIONAL, INC.
              CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE FISCAL QUARTERS ENDED OCTOBER 3, 1998, AND SEPTEMBER 27, 1997
                           (Unaudited)
                     (amounts in thousands)

<TABLE>
<CAPTION>

                                             Oct. 3,   Sept. 27,
                                               1998      1997
                                             --------  --------
<S>  <C>                                     <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                 $  22,838 $  21,510
  Adjustments to reconcile net income to 
  net cash provided by operating activities:
     Depreciation and amortization              33,378    31,249
     Minority interest in partnerships          34,246    30,340
     Other, net                                  3,176     2,802

  Change in working capital items:
     Receivables                               (43,369)   (4,465)
     Inventories                                 2,955    (3,190)
     Other current assets                       (1,910)   (1,704)
     Accounts payable and accrued liabilities   14,896    32,453
  Other, net                                    (4,896)   (3,344)
                                             --------- ---------
  Net cash provided byoperating activities   $  61,314 $ 105,651
                                             ========= ========= 

CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                       $ (31,017)$ (28,078)
  Sales of marketable securities                40,751       ---
  Other, net                                        14      (377)
                                             --------- ---------
  Net cash provided by (used in) 
  investing activities                       $   9,748 $ (28,455)
                                             ========= =========

CASH FLOWS FROM FINANCING ACTIVITIES
  Cash dividends paid on common stock        $  (2,805)$  (2,888)
  Cash dividends paid on preferred stock           ---    (1,245)
  Minority partners tax distributions          (12,785)   (8,905)
  Proceeds from the issuance of long-term debt      ---   11,650
  Purchase of treasury stock                   (38,085)  (16,259)
  Other, net                                       340      421
  Net cash used in financing activities      --------- ---------
                                             $ (53,335)$ (17,226)
                                             ========= =========

NET CHANGE IN CASH AND CASH EQUIVALENTS
  Net increase in cash and cash equivalents  $  17,727 $  59,970

  Cash and cash equivalents at beginning of year  119,087   36,801
                                             --------- ---------
  Cash and cash equivalents at end of period $ 136,814 $  96,771
                                             ========= =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the period for:
     Interest, net of amounts capitalized    $   6,230 $   4,268
     Income taxes (refunds), net             $   8,411 $  (2,752)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

</TABLE>
<PAGE>

                     TJ INTERNATIONAL, INC.
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)

<TABLE>
<CAPTION>

INVENTORIES

Inventories consisted of the following:
                                   (amounts in thousands)
     <S>                      <C>       <C>       <C>  
                              Oct. 3,   Jan. 3,   Sept. 27,
                               1998      1998       1997
                              --------  --------  --------

     Finished goods           $ 48,046  $ 51,737  $ 38,590
     Raw materials and          17,953    17,217    16,149
       work-in-progress       --------  --------  --------

     Total Inventory          $ 65,999  $ 68,954  $ 54,739
                              ========  ========= ========

</TABLE>

Effective January 4, 1998, the Company changed its inventory costing method
for its lumber, veneer, Microllam-Registered Trademark- LVL, TJI-Registered
Trademark- Joists and open web trusses from LIFO to FIFO.   The Company is
executing a strategy of increasing the sales of its new technology
Parallam-Registered Trademark- PSL, TimberStrand-Registered Trademark- LSL and
TJI-Registered Trademark- TS-120 TimberStrand-Registered Trademark- flanged
I-joist products which are valued using the FIFO methodology.  The Company
believes using the FIFO inventory costing methodology for all its product
lines is a more appropriate and consistent matching of costs against revenues. 
This change in accounting had no material impact on quarterly results and as a
result, quarterly information is not restated.

<PAGE>


NET INCOME PER COMMON SHARE:

Basic net income per common share is based on net income adjusted for
preferred stock dividends and related tax benefits divided by the weighted
average number of common shares outstanding.  Diluted net income per common
share assumes conversion of the Employee Stock Ownership Plan (ESOP)
convertible preferred stock (ESOP preferred stock) into common stock at the
beginning of the fiscal year and weighted average number of common shares
outstanding after giving effect to stock options under the treasury stock
method.


Basic net income and diluted net income were calculated as follows:

<TABLE>
<CAPTION>
                                   (amounts in thousands)
<S>                      <C>       <C>       <C>       <C>
                            For the fiscal    For three fiscal
                            quarter ended      quarters ended  
                         ----------------------------------------
                         Oct. 3,   Sept. 27, Oct. 3,   Sept. 27,
                          1998      1997      1998       1997
                         ----------------------------------------
BASIC NET INCOME
                                                       
Net income as reported   $ 7,931   $ 8,542   $22,838   $21,510

Preferred stock dividends, net
   of related tax benefits   (251)    (243)     (753)     (737)
                         --------  --------  --------  --------

Basic net income         $ 7,680   $ 8,299   $22,085   $20,773
                         ========  ========  ========  ========
DILUTED NET INCOME

Net income as reported   $ 7,931   $ 8,542   $22,838   $21,510

Additional ESOP contribution
   payable upon assumed
   conversion of ESOP
   preferred stock, net of
   related tax benefits     (165)     (174)     (496)     (522)  
                         --------  --------  --------  --------

Diluted net income       $ 7,766   $ 8,368   $22,342   $20,988
                         ========  ========  ========  ========
                                                                             
</TABLE>
<PAGE>

COMPREHENSIVE INCOME (LOSS)

Comprehensive income for the periods include the following:

<TABLE>
<CAPTION>
                                   (amounts in thousands)
<S>                      <C>       <C>       <C>       <C>
                            For the fiscal   For the three fiscal
                            quarter ended       quarters ended  
                         ----------------------------------------
                         Oct. 3,   Sept. 27, Oct. 3,   Sept. 27,
                          1998      1997      1998       1997
                         ----------------------------------------

Net income               $ 7,931   $ 8,542   $22,838   $21,510
Other Comprehensive Loss  (1,612)     (156)   (2,955)     (564)
                         --------  --------  --------  --------

Comprehensive Income     $ 6,319   $ 8,386   $19,883   $20,946
                         ========  ========  ========  ========
          
</TABLE>

Accumulated other comprehensive income (loss) for each period ended was as
follows:

<TABLE>
<CAPTION>
                                        (amounts in thousands)
<S>                                <C>       <C>       <C>  
                                   Oct. 3,   Jan. 3,   Sept. 27,
                                    1998      1998       1997
                                   --------  --------  --------

Balances at beginning of period-
  cumulative translation adjustment$(3,805)  $(2,780)  $ (2,780)

Changes within periods-
  cumulative translation adjustment (2,955)   (1,025)      (564)
                                   --------  --------  ---------
Balance at end of period-
  cumulative translation adjustment$(6,760)  $(3,805)  $ (3,344)
                                   ========  ========  =========

</TABLE>
<PAGE>

                     TJ INTERNATIONAL, INC.
              MANAGEMENT'S DISCUSSION AND ANALYSIS
          FOR THE FISCAL QUARTER ENDED OCTOBER 3, 1998


OPERATING RESULTS

TJ International, Inc., (the Company) is the 51% owner and managing partner of
Trus Joist MacMillan a Limited Partnership (TJM), the world's leading
manufacturer and marketer of engineered lumber products.  Substantially all of
the Company's operating assets are held and revenue generated by TJM. 
MacMillan Bloedel Limited (MB) owns a 49% interest in TJM.

The following comments discuss material variations in the results of
operations for the comparative periods presented in the condensed consolidated
statements of income.

Sales

The Company's sales by quarter during the current year and for the preceding
four years are as follows:

<TABLE>
<CAPTION>
                        Sales by Quarter
                     (amounts in thousands)

<S>            <C>       <C>       <C>       <C>       <C>
Quarter          1998       1997      1996      1995      1994
--------       --------  --------  --------  --------  --------
First          $185,829  $161,263  $111,157  $109,941  $118,163
Second          193,361   185,730   155,050   123,882   128,773
Third           222,423   185,576   179,571   137,759   136,266   
 
Fourth                    173,747   131,388   113,263   112,858 
               --------  --------  --------  --------  --------
               $601,613  $706,316  $577,166  $484,845  $496,060
               ========  ========  ========  ========  ========  
</TABLE>



Third Quarter of 1998 Compared With the Third Quarter of 1997

Third quarter sales were $222 million, an increase of $36.9 million or 20%
from the prior year third quarter. Year to date, sales grew to $601.6 million,
or 13% from the $532.6 million reported a year ago.  Sales per North American
housing start for the nine months ending in September 1998 were $369, which is
an increase of 7.3% from the first nine months of 1997. Management believes
this increase is a strong indicator that 1998 will be the Company's 16th
consecutive year of growth in this key benchmark.

<PAGE>

The increase in sales resulted from growing acceptance of engineered lumber in
construction due to the higher quality and better value that engineered lumber
products provide. This growth has been achieved despite the challenging market
conditions of declining prices for commodity solid sawn lumber products, which
remain the primary competitor for the Company's engineered lumber products.
Prices for 2x10 Douglas fir green lumber were down on average 38% from the
prior year third quarter.  Prices for 2x10 southern yellow pine were down on
average 37%. Although prices for competing commodity products were much lower,
the Company has maintained and increased its base of  builders who have used
the Company's products over the years.  However, the low prices for competing
commodity solid sawn lumber made it more difficult during the quarter to
convert builders who have not used the Company's products in the past.

Unit volume growth accounted for virtually all of the sales increase for the
third quarter of 1998. The Company's average price was essentially flat in the
third quarter of 1998 compared to the third quarter of 1997.  Volume gains
were strong for all of the Company's products lines with TJI-Registered
Trademark- Joist products showing the strongest gain followed closely by
TimberStrand-Registered Trademark- LSL, Microllam-Registered Trademark- LVL,
Parallam-Registered Trademark- PSL, and Open Web joist products.

Gross margins for the third quarter of fiscal 1998 were 25.2% compared with
28.1% in the third quarter of 1997. The most significant factor in the margin
decline was the cost of oriented strand board (OSB) which is used as the  raw
material component for the web in the Company's TJI-Registered Trademark-
Joist products. Commodity OSB prices increased on average 96% for the third
quarter of 1998 as compared to the prior year's third quarter.  Average
commodity OSB 7/16" North Central pricing for the third quarter of 1997 was
$154, while in the third quarter of 1998 the average price was $302. 
Commodity OSB pricing reached a high of $325 in the third quarter of 1998,
however prices dropped dramatically and ended the quarter at approximately
$205.  

In comparing the third quarter of 1998 to 1997, the higher OSB prices
negatively impacted operating income by approximately $8 million or 14 cents
per diluted share.  High OSB costs were partially offset by improved operating
efficiencies at many of the Company's manufacturing plants.  The Company
experienced improved productivity and throughput, lower unit costs, and higher
product prices for both TimberStrand-Registered Trademark- LSL and
Parallam-Registered Trademark- PSL products. The Company also continues to
execute its plan to transition its new technology product line to higher value
products.  These products include TimberStrand-Registered Trademark- LSL
headers, wall framing and door components, as well as the Company's
TJI-Registered Trademark--Pro 120 TS, which uses TimberStrand-Registered
Trademark- LSL as a flange material in the joist. 

Selling expenses increased $3.8 million, from $17.4 million in the third
quarter 1997 to $21.2 million in the third quarter 1998, increasing slightly
as a percent of sales to 9.5% from 9.4% in 1997.

General and administrative expenses increased to $9.9 million in the third
quarter 1998 from $8.7 million in the prior year's third quarter.  However, as
a percentage of sales, general and administrative expenses declined in the
third quarter of 1998 to 4.4% compared to 4.7% for the third quarter 1997. 
The increase in total spending is primarily driven by the Company's investment
in business support software training and implementation.  The new business
and transaction processing systems are intended to provide the infrastructure
for future growth.

<PAGE>

First Three Quarters of 1998 Compared with the First Three Quarters of 1997

Sales for the first three quarters of 1998 increased by $69.0 million or 13.0%
from the comparable period last year. Unit volume sales growth accounted for
essentially all of this increase.

Gross margins decreased from 27.5% to 26.7% between the two periods. The
decrease in gross margin is mainly attributable to increased OSB cost during
the third quarter of 1998 compared to the third quarter 1997.

Selling expenses increased $6.4 million or 11.9%, but declined as a percentage
of sales from 10.1% to 10.0%.  General and administrative expenses increased
$2.8 million, however, as a percentage of sales declined to 4.8% year-to-date
1998 from 4.9% year-to-date in 1997.

LIQUIDITY AND CAPITAL RESOURCES

Oct. 3, 1998 Compared to January  3, 1998

Working capital increased $4.2 million during the first three quarters of 1998
to $223.4 million. The Company's cash flows from operations were $61.3 million
for the first nine months of 1998.

Oct. 3, 1998 Compared to Sept. 27, 1997

Working capital increased $75.3 million from the prior year, to $223.4 million
at Oct. 3, 1998.  The increase was due to additional long-term debt issued in
the fourth quarter of 1997 (described below) and strong cash flow from
operations combined with a modest capital program.  Inventory levels have also
been increased to improve service levels and reduce lead times to customers. 
Receivables have also increased as more customers purchase and ship via rail
which have 60 day terms. 

The Company completed construction in late 1997 of a TimberStrand-Registered
Trademark- LSL - flange I-line at its East Kentucky location.  The new
production facility allows the Company to produce TJI-Registered Trademark-
Joist products, using TimberStrand-Registered Trademark- LSL as the top and
bottom flange material.  Market introduction of this product began in the
first quarter 1998.  The additional I-line required a capital investment of
approximately $16.5 million in 1997.

Also in 1997, the Company began construction of a Microllam-Registered
Trademark- LVL, TJI-Registered Trademark- Joist plant located in Evergreen,
Alabama, with production scheduled to begin late in the fourth quarter of
1998.  The new production facility will allow the Company to produce
traditional Microllam-Registered Trademark- LVL and TJI-Registered Trademark-
Joist products.  The plant will require a capital investment of approximately
$45 million.

The Company is evaluating potential sites for a third TimberStrand-Registered
Trademark- LSL plant but has not determined whether or when to proceed with
construction.  The Company believes that current cash balances, cash generated
from operations, and borrowing under a $150 million Revolving Credit Facility
will be sufficient to meet the on-going operating and capital expansion needs
of the Company.  The Company also believes that additional or expanded lines
of credit or appropriate long-term capital can be obtained to fund other major
capital requirements as they arise, or to fund an acquisition.

<PAGE>

In the first quarter 1998, the Board of Directors authorized the Company to
purchase $3.1 million of common stock.  In addition, at the Company's Board of
Directors meeting held on May 27, 1998 the Board authorized the Company to
purchase $35 million of common stock. The Company purchased $4.4 million in
the second quarter of 1998 and $30.6 million in the third quarter 1998
completing that stock purchase plan.

For 1997, the Company's Board of Directors authorized the purchase of up to
$15 million of the Company's common stock at market prices. The Company
purchased $8.3 million of treasury stock during the first quarter of 1997 and
$6.7 million of stock during the second quarter of 1997 completing that stock
purchase plan.  In addition, the Board of Directors authorized and the Company
purchased an additional $1.3 million of stock during the third quarter of
1997.  

In the fourth quarter of 1997, the Company issued $42.6 million of taxable
notes to preserve the Company's ability in the future to issue additional
industrial revenue bonds to help finance the East Kentucky
TimberStrand-Registered Trademark- LSL plant.  The taxable notes are due in a
single maturity on November 15, 2001, subject to prepayment at the option of
the Company, and are unsecured. In addition, during the second quarter of
1997, the Company issued $11.65 million of industrial revenue bonds associated
with the construction of the East Kentucky plant.  The bonds are due in a
single maturity in 2027, with interest payable semi-annually at 6.55%.

During the third quarter 1998 the Company issued $6.7 million of tax exempt
variable rate demand bonds related to the East Kentucky plant.  The interest
rate on these bonds is established weekly, and the interest is paid monthly. 
The bonds are unsecured, with the principal due in a single maturity in 2028. 
The proceeds from the variable rate demand bonds were used to prepay, without
penalty, $6.7 million of the $42.6 million of taxable notes described above.

The Company sold its windows operations in 1996, however, it retained certain
liabilities related to these operations.  Management believes that existing
reserves are adequate to meet all subsequent liabilities that may arise
related to the discontinued operations.

Substantially all of the Company's operating assets are held, and revenue
generated, by its TJM partnership.  The partnership regularly distributes cash
to the partners to fund the tax liabilities generated by the partnership at
the corporate level.  All other distributions of cash by the partnership are
dependent on the affirmative votes of the representatives of the minority
partner.  Accordingly, there can be no assurance that such distributions will
be approved and thereby be available for the payment of dividends or to fund
other operations of the Company. 

<PAGE>

INDUSTRY, COMPETITION, AND CYCLICALITY

The Company's engineered lumber products continue to gain market acceptance as
high-quality alternatives to traditional solid-sawn lumber products.  Through
the Company's intensive marketing efforts, builders and other wood users are
increasingly recognizing the consistent quality, superior strength, lighter
weight, and ease of installation of engineered lumber products.  The Company
believes that this trend will continue well into the future.

No other company possesses the range of engineered lumber products, the levels
of service and technical support, or the second generation technologies of
TimberStrand-Registered Trademark- LSL or Parallam-Registered Trademark- PSL. 
There are, however, a number of companies, including several large forest
products companies, that now produce look-alike wood I-joist and laminated
veneer lumber products.  Several of these companies have announced capacity
expansions.  These look-alike products are manufactured using processes
similar to the Company's oldest generation technologies. 

The Company believes its network of manufacturing plants and multiple
technologies position it as the low-cost producer of engineered lumber.  While
competition helps expand the market for engineered wood products, including
those manufactured by the Company, it may also make the existing markets more
price competitive.  Traditional wide-dimension lumber, however, remains the
predominant structural framing material used in residential construction and
is the primary competitor of the Company's products.  Commodity lumber prices
historically have been subject to high volatility, and during periods of
significant lumber price movements the Company's prices have trended in the
same direction.

The Company's operations are strongly influenced by the cyclicality and
seasonality of residential housing construction.  This industry experiences
fluctuations resulting from a number of factors, including the state of the
economy, consumer confidence, credit availability, interest rates, and weather
patterns. Consistent with the seasonal pattern of the construction industry as
a whole, the Company's sales have historically tended to be lowest in the
first and fourth quarters and highest in the second and third quarters of each
year.


RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the Financial Accounting Standards Board issued Statement No.
131 Disclosures about Segments of an Enterprise and Related Information ("SFAS
No. 131").  SFAS No. 131 requires publicly-held companies to report segment
and other information which is utilized by the Chief Executive Officer and to
reconcile and segment information to financial statement amounts.  SFAS No.
131 is effective for the Company for the year ending January 2, 1999.  The
Company is evaluating the impact of this new standard on its reporting and
disclosure.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities.  The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value.  The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. 
Special accounting for qualifying hedges allows a derivatives gains or 

<PAGE>

losses to offset related results on the hedged item in the income statement,
and requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting.  Statement 133 is
effective for fiscal years beginning after June 15, 1999.  The Company has not
yet quantified the impact of adopting Statement 133 on its financial
statements and has not determined the timing of or method of its adoption of
Statement 133.  However, the Statement could increase volatility in earnings
and other comprehensive income.


YEAR 2000 ISSUE

The Company is working to resolve the effects of the Year 2000 problem on its
information systems, including the financial and transaction systems,
production and process control systems, and compliance status of suppliers'
systems.  The Year 2000 problem, which is common to most businesses, concerns
the inability of such systems to properly recognize the process dates and
date-sensitive information on and beyond January 1, 2000.

In 1997, the Company formally began a series of assessments, company-wide
tracking and awareness programs.  These programs insured corporate-wide
awareness of the Year 2000 issues, standardized the inventory and assessment
methods, and tracked the results of the assessments.

As of September of 1998,  the Company had successfully educated key personnel
on the issues, completed its inventory and assessments of the Year 2000 risks
for financial and transaction systems and production and process control
systems.  A number of applications in the financial and transaction processing
systems are compliant due to recent implementations and upgrades. The Company
has been configuring and installing Year 2000 compliant systems as part of its
program to provide significantly improved functionality in its business
support software.  This program is intended to provide the infrastructure for
future growth.  The Company's core financial and reporting systems are not yet
fully compliant but are scheduled to be complete by late fall 1999.  To date,
no significant issues have been identified in connection with the Company's
assessment of its primary production and process control systems.  The Company
expects to complete replacement of the identified non-compliant equipment or
software by the third quarter of 1999.  

The Company is also in the process of surveying vendors, principal customers
and business partners regarding their Year 2000 compliance. Contingency plans
have been identified or are currently being developed in the event either the
Company's systems or key third-party systems are not compliant.

While the Company currently believes that it will be able to modify or replace
its affected systems in time to minimize any detrimental effects on its
operations, failure to do so, or the failure of the Company's major customers
and suppliers to modify or replace their affected systems, could have a
material adverse impact on the Company's results of operations, liquidity or
consolidated financial position in the future.  The most reasonably likely,
worst case, scenario of failure by the Company or its customers or suppliers
to resolve the Year 2000 problem would be a temporary slowdown or cessation of
manufacturing operations at one or more of the Company's facilities and a
temporary inability on the part of the Company to timely process orders and
billings and to deliver finished products to customers.  The Company is
currently identifying and considering various contingency operations,
including identification of alternate suppliers, vendors and service

<PAGE>

providers, and manual alternatives to systems operations, which will allow the
Company to minimize the risk of any unresolved Year 2000 problems in its
operations and to minimize the effect of any unforeseen Year 2000 failures.

The Company currently estimates the cost to complete compliance should not
exceed $3,000,000.  These costs will be expensed as incurred, unless new
software, equipment, or hardware is purchased that should be capitalized in
accordance with accounting policy.


FORWARD-LOOKING STATEMENTS

This Form 10-Q includes a number of "forward-looking statements" as defined by
the Private Securities Litigation Act of 1995.  Forward-looking statements
include, without limitation, statements regarding the adequacy of the
Company's reserves for discontinued operations, completion date and success of
the Company's Year 2000 compliance program, and other statements regarding the
Company's beliefs.  Investors are cautioned that forward-looking statements
are subject to an inherent risk that actual results may vary materially from
those described, projected or implied herein.  Factors that may result in such
variance include, among others: changes in interest rates, commodity prices,
and other economic conditions; actions by competitors; changing weather
conditions and other natural phenomena; actions by government authorities;
technological developments; future decisions by management in response to
changing conditions; and misjudgments in the course of preparing
forward-looking statements.  Other factors are discussed in the Company's
filings with the Securities and Exchange Commission.




Microllam-Registered Trademark-, Parallam-Registered Trademark-,
TJI-Registered Trademark- Joist and TimberStrand-Registered Trademark- are
registered trademarks of Trus Joist MacMillan a Limited Partnership, Boise,
Idaho

<PAGE>

                     TJ INTERNATIONAL, INC.
                             PART II
                        Other Information


Item 6.   Exhibits and Reports on Form 8-K


          (a)  Filed as exhibits to this report are the following:

               (18) Letter Regarding Change in Accounting Principles
               (27) Financial Data Schedule

          (b)  No reports on Form 8-K were filed during the quarter.

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                      TJ INTERNATIONAL INC.
                            SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                              TJ INTERNATIONAL, INC.


                              /s/ Valerie A. Heusinkveld
                              ----------------------------------
                              Valerie A. Heusinkveld
                              Vice President, Finance & Chief
                                 Financial Officer

Date:   November 17, 1998

<PAGE>

               SECURITIES AND EXCHANGE COMMISSION

                     WASHINGTON, D.C.  20549

                      EXHIBITS TO FORM 10-Q



           Quarterly Report Under section 13 or 15 (d)

             of the Securities Exchange Act of 1934

For the fiscal quarter ended October 3, 1998  Commission File Number 0-7469

                     TJ INTERNATIONAL, INC.

                          EXHIBIT INDEX


Exhibits                                                 Page
--------                                               ----------
(18) Letter Regarding Change in Accounting Principles  Document 2
(27)  Financial Data Schedule                          Document 3

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